According to feedback from cotton trading companies in Qingdao, Zhangjiagang and other places, since mid-July, the phenomenon of buyers requesting to cancel the contract, re-sign the purchase contract at market price, or negotiate a “buy-back” contract by the seller has continued to increase, including some cotton textile companies that have cooperated with them all year round. For old customers of factories and middlemen, the contract performance rate has dropped again and again. Foreign businessmen also expressed that buyers from not only China, but also India, Turkey, Vietnam, Indonesia, Pakistan and other countries are willing to implement the 2021/22 US cotton contract. is weakening, the cancellation of early high-priced contracts may become the focus of the recent game between buyers and sellers. An international cotton merchant said that there were three main reasons for the postponement and cancellation of the US cotton contracts signed in April, May and June: First, ICE cotton futures have plummeted since mid-May, with the main December contract falling from 133.79 cents/ The pound fell to 82.54 cents/pound, and some buyers entered the market at 110-120 cents/pound to buy the bottom (December contract). As a result, the current loss is about 20-30 cents/pound, which is difficult for purchasers to accept and digest; secondly, due to The Federal Reserve continues to aggressively raise interest rates (by 75 basis points in June and July respectively), including the sharp depreciation of RMB, Indian rupee, Vietnamese dong and other currencies against the US dollar, which will “make matters worse” for cotton import costs; third, in the second quarter of 2022 Since then, cotton textiles, cotton products and clothing in China, India, Pakistan and other countries have been stuck in the dilemma of inverted production and sales, weak new orders, and cotton consumption has obviously peaked and fallen. Demand has declined, and some cotton-using companies can only take measures such as delaying performance and canceling contracts. Means to alleviate liquidity pressure. A medium-sized cotton company in Huangdao believes that if the main short-term ICE cotton futures contract cannot recover 100 cents/pound or 110 cents/pound, it is expected that a certain amount of U.S. cotton purchase contracts will still be canceled or postponed; traders in this process China is very passive and can only keep a close eye on each contract signed in the early stage, communicate with customers quickly, and fulfill the contract as soon as possible; for port bonded cotton, measures such as reducing the basis difference and increasing bargaining space are adopted to stimulate shipments, striving to “grasp both hands. Both hands must be strong.” It is understood that the main contract of ICE cotton futures is in the range of 85-95 cents/pound. There are a few international cotton merchants and large trading companies purchasing bonded cotton resources at the port, mainly US cotton/Brazilian cotton.
According to feedback from cotton trading companies in Qingdao, Zhangjiagang and other places, since mid-July, the phenomenon of buyers requesting to cancel the contract, re-sign the purchase contract at market price, or negotiate a “buy-back” contract by the seller has continued to increase, including some cotton textile companies that have cooperated with them all year round. For old customers of factories and middlemen, the contract performance rate has dropped again and again. Foreign businessmen also expressed that buyers from not only China, but also India, Turkey, Vietnam, Indonesia, Pakistan and other countries are willing to implement the 2021/22 US cotton contract. is weakening, the cancellation of early high-priced contracts may become the focus of the recent game between buyers and sellers.
An international cotton merchant said that there were three main reasons for the postponement and cancellation of the US cotton contracts signed in April, May and June: First, ICE cotton futures have plummeted since mid-May, with the main December contract falling from 133.79 cents/ The pound fell to 82.54 cents/pound, and some buyers entered the market at 110-120 cents/pound to buy the bottom (December contract). As a result, the current loss is about 20-30 cents/pound, which is difficult for purchasers to accept and digest; secondly, due to The Federal Reserve continues to aggressively raise interest rates (by 75 basis points in June and July respectively), including the sharp depreciation of RMB, Indian rupee, Vietnamese dong and other currencies against the US dollar, which will “make matters worse” for cotton import costs; third, in the second quarter of 2022 Since then, cotton textiles, cotton products and clothing in China, India, Pakistan and other countries have been stuck in the dilemma of inverted production and sales, weak new orders, and cotton consumption has obviously peaked and fallen. Demand has declined, and some cotton-using companies can only take measures such as delaying performance and canceling contracts. Means to alleviate liquidity pressure.
A medium-sized cotton company in Huangdao believes that if the main short-term ICE cotton futures contract cannot recover 100 cents/pound or 110 cents/pound, it is expected that a certain amount of U.S. cotton purchase contracts will still be canceled or postponed; traders in this process China is very passive and can only keep a close eye on each contract signed in the early stage, communicate with customers quickly, and fulfill the contract as soon as possible; for port bonded cotton, measures such as reducing the basis difference and increasing bargaining space are adopted to stimulate shipments, striving to “grasp both hands. Both hands must be strong.” It is understood that the main contract of ICE cotton futures is in the range of 85-95 cents/pound. There are a few international cotton merchants and large trading companies purchasing bonded cotton resources at the port, mainly US cotton/Brazilian cotton.
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